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Congratulations College Grads! Open Your Wallets and Face the Debt Load

By    |   Tuesday, 20 May 2014 03:25 PM

Congratulations to the Class of 2014 for being the most indebted group of college graduates in U.S. history!

That's the greeting card headline from The Fiscal Times, which took a look at what the current crop of college grads will owe in exchange for their diplomas, as overall student debt now exceeds a whopping $1.2 trillion.

According to Edvisors, an education marketing company, the Class of 2014 will owe an average of $33,000. That's more than double the amount that students 20 years ago owed.

Editor's Note:
38 Trades That Could Turn $1,000 Into $49,000

An estimated 70 percent of students incur student debt now, compared with 45 percent in 1993.

The impact on the overall economy is likely not negligible, by many accounts.

"Having student debt can affect major life choices such as starting a home or saving for retirement," said Lauren Asher, the president of the Institute for College Access & Success.

The Federal Reserve Bank of New York has concluded student debt is already holding back the U.S. housing market.

A study by Pew Research found the average net worth of graduates with student debt is only $8,700 versus $64,700 for graduates without college loans, The Times noted.

People who had student debt were also more likely to have other forms of debt like credit card debt and car loans. The Pew study found college grads under 40 with student loans had an average total debt of $137,010 versus $73,250 for those carrying debt without student loans.

Has it reached the point where the debt overcomes the value of going to college? Not yet, according to The Times, which said education experts believe the long-term value of going to college still outweighs the alternative of not going.

"Data confirm over and over that college, on average, is the best investment you can make in your life," Asher said.

Student debt problems are not confined to the United States alone. An artist in Chile stole $500 million in college student debt records from a university, then torched them into a pile of white ash, The Washington Post reported. The artist, Papas Fritas, said it was "act of love," and his video of the act went viral.

"It's finished. You don't have to pay another peso [of your student loan debt]. We have to lose our fear, our fear of being thought of as criminals because we're poor," he explained.

The Congressional Budget Office estimates the federal government will earn roughly $127 billion from student lending during the next 10 years, according to Slate.

Editor's Note: 38 Trades That Could Turn $1,000 Into $49,000

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Congratulations to the Class of 2014 for being the most indebted group of college graduates in U.S. history!
student, loan, debt, college
Tuesday, 20 May 2014 03:25 PM
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